NYC’s Tech Sector Matures to Major Economic Engine Status
Over the years, New York City’s technology sector has grown from a nascent industry that added “a bit of much-needed diversification to the city’s finance-heavy economy” to a level of importance that has established the sector as a major economic driver. The “Sustaining NYC’s Tech Edge” report recently released by the Center for an Urban Future (CUF) and Tech:NYC reveals that since the start of the pandemic, the tech sector has added jobs at a rate that is nearly ten times the city’s overall economy, accounting for a “striking 14% of all employment growth citywide over the past decade.” The tech industry has “also become New York’s largest — and most dependable — source of middle- and high-wage jobs.” Employment in the sector surged by 64 percent between 2014 and 2024 — nearly four times the 16.8% rate of overall private sector job growth; and during that time, an average of 8,000 jobs a year within the tech sector were added across the five boroughs. More importantly, the impact of the tech sector on employment has spread to other parts of the city’s economy. The results of an analysis by CUF of data from labor-market analytics firm Lightcast revealed that “47.5% of all job postings in the city in 2024 sought out candidates with tech skills.” Finance companies in the city employed 10,313 software developers in 2024, with other sectors such as legal services, construction, healthcare, and retail similarly seeing a rise in job postings where tech skills are a requirement
The pace of growth has prompted “virtually all of the big West Coast VC firms that had once shunned New York” to establish offices in the city, while “private equity firms and corporations — from Fidelity to Goldman Sachs — have greatly upped their investments in New York-based start-ups.” Further sparking investment interest beyond the U.S. border is the maturation of the city’s tech ecosystem – a support structure that has taken several huge steps forward and contributed to New York’s ability to become the home of 8,750 funded tech start-ups. Trailing only behind the San Francisco Bay Area/Silicon Valley which has 14,574 funded startups, New York City has a more diverse tech sector than other major tech hubs, with Black and Hispanic New Yorkers making up 24.3% of the city’s tech sector workforce. However, New York is facing heightened competition from other U.S. cities, particularly those that have similarly developed a critical mass of tech companies and are significantly more affordable than New York. Another challenge is what many of the interviewed tech leaders describe as a “mismatch between the tech sector’s growing importance to New York and the inadequate support it gets from city and state government,” acknowledging that while well-calibrated regulation is important, “the balance in New York has tipped too far — resulting in a wave new rules that are often poorly designed, burdensome to implement.”